M&Co pushing ahead for further international growth

SCOTT REID

HIGH street stalwart M&Co is pushing ahead with plans for further international growth after slashing its full-year losses.

The Renfrew-based firm, which ranks as one of the UK’s biggest privately-owned fashion chains with nearly 300 stores, unveiled its overseas push last year with a franchising deal covering the Gulf region.

Unveiling year-end accounts and an update on trading, chairman Iain McGeoch yesterday reported that the firm had seen an “encouraging” level of sales through the new outlets.

He said: “We remain excited by our developing international business, having opened five franchise stores overseas and a further seven planned for later in the year.”

McGeoch also highlighted strong domestic and overseas growth at the chain’s online business.

The newly-filed accounts show that parent company Mackays Stores Group racked up a loss before tax of £2.3 million in the year to 22 February, which compares with a deficit of £8.6m a year earlier.

A dip in turnover to £168.9m, from £173.3m, was blamed on a combination of “extremely-poor summer weather” last year and a small net reduction in store numbers.

The firm said its underlying financial performance was “much improved” over the previous year and pointed to a positive operating profit of £400,000 as well as earnings before interest, tax, depreciation and amortisation (Ebitda) of just over £10m.

McGeoch said net debt had been cut by £9.4m with a further “significant” reduction in the current year to date.

“Our improved performance has continued and our year to date operating profit is well ahead of 2012-13,” he added.

“Our online business continues to grow strongly in the UK and internationally and omni-channel trading continues to be an integral part of our business strategy.”

During the year under review, seven stores were opened while 12 “non-profitable” branches were closed.

Writing in the accounts, Mackays’ directors noted: “We look forward to the forthcoming year with confidence and expect to make further progress towards the profit levels achieved in past years.”

The £8.6m pre-tax loss suffered in 2011-12 was the company’s first in 50 years.

According to the latest accounts, the group’s headcount dropped by 110 to 3,742, probably as a result of the net reduction in stores.

The overall bill for wages and pension costs fell to £41.4m from £45.1m. Meanwhile, the highest-paid director – likely to be McGeoch – saw their pay package, including benefits, cut from £309,219 to £224,037.

No dividend was paid during the period, following a payout of almost £2m the year before. The firm’s shareholders are listed at Companies House as the McGeoch and McKimmie families and their trusts, along with James Bell and Charles Parkin.